How to avoid bank transfer fees
Transferring money can be a safe way to transfer money quickly, but it often comes with high fees. There are ways to reduce wire transfer fees or avoid them all together, if you know how. If you need to wire money often, you’ll want to choose a bank with the lowest possible fees.
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What is a wire transfer and why should I use it?
A wire transfer is when you electronically transfer money from one bank to another. It is a reliable and secure way to send money. It’s fast – you can usually transfer money the same day in the US and within two days abroad – which is why people tend to use it. It is often used with large purchases such as a down payment on a house or a deposit for a wedding venue. And if you are doing business with a company overseas, this is a reliable way to get paid.
When you transfer money, it goes through a network, either the Society for Worldwide Interbank Financial Telecommunications (SWIFT) or Fedwire.
Advantages and disadvantages of bank transfers
- Quickly – Transfers usually take place within one business day in the United States and two internationally. Once the money is transferred, there is no bank hold for the recipient, which means the recipient doesn’t have to wait for the money to clear.
- Secured – If someone transfers money to you, unlike a check, you won’t have to worry about funds rebounding.
- Tedious – Bank-to-bank transfers are often easier than wire transfers and require less information. Many banks have long instructions for wire transfers, which makes it easy to get it wrong.
- High fees – Many banks charge for this service, both on outgoing and incoming wires.
- Hidden fees – Your bank may not charge a fee, but there may be an intermediary bank that does charge one. You may not know it until the money appears in your account.
- Used for scams – Even though wire transfers are secure, scammers will often try to play with the system and get you to transfer money to the wrong account. This is especially common with down payments or other fees for buying a home – crooks email you instructions to their bank account (not the one you’re supposed to be paying). Always make sure to verify that the account name and number are correct by calling the recipient of the transfer before making a transfer.
When am I billed for bank transfer fees?
Banks charge wire transfer fees on outgoing and inbound transfers.
This means that if you want to wire someone money, you will likely have to pay a fee on top of anything you send. For example, if you want to wire $ 20,000 for a down payment on a house, you could pay an additional $ 35 for wire transfer fees.
Likewise, if someone in another country transfers $ 1,000 to you, but you only see $ 970 in your bank account, it’s because your bank has withdrawn $ 30. If you’re really unlucky, the issuing bank or an intermediary bank (an intermediary bank) will also withdraw a portion – meaning you could see up to $ 50 to $ 100 withdrawn from your money before it. does not arrive on your account.
How to avoid bank transfer fees
First, determine if you really need to wire the money. If you need to transfer money to the United States, there are often ways to do it with your bank that don’t require a wire transfer. And if that doesn’t work, choose a bank with low or no fees (more details in the next section).
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Bank to bank transfer
Check if your bank charges an external transfer fee. If they don’t, it can be a great way to avoid wire transfer fees while transferring money electronically. Some of the banks that don’t charge for external transfers include:
If you’re sending money to a friend or family member, consider using an app. You will need to link your bank account to the app so that it can withdraw the funds and send them to the recipient. There are a multitude of applications to choose from, including:
- Paypal – The original person-to-person app for sending money. As long as you use your bank account (not a credit card) and send the money to a friend (without using the trading option), it should be free.
- Venmo – One of the most popular money transfer apps. Link it to your bank account to easily send money to a friend.
- Google Wallet – The easy way to send money. Link your debit card to the app (or use your desktop computer) to send money. But you can’t send money internationally with Google Wallet.
To make these apps a no-cost experience, link your bank account and not a credit card – these will incur a fee. To learn more about which apps make it easy for you to send money, check out our Guide to the Five Apps that Make Sending Money Easy.
If you need to send money overseas but don’t have a bank account with a low transfer fee, then TransferWise is a low-cost option that’s especially good if you’re transferring money to United States. I use it frequently because it’s cheap and fast – the company offers good exchange rates and low fees. If you’re sending money using TransferWise, you’ll need to create an account (it’s free) and you’ll need the recipient’s bank details. The only major downside is that the fees for transferring money from the US to other countries tend to be higher.
Read more: Review of TransferWise
Using a credit union
Credit unions are more likely to have no fees for inbound wire transfers – domestic and foreign – than large banks. So if you think you are going to be getting a lot of leads, this is a good way to investigate. However, most credit unions will continue to charge for outgoing wire transfers, typically between $ 20-25 domestically and $ 40 internationally. If you are not familiar with credit unions, they are local organizations. They often have better interest rates for savings and lower borrowing rates, and they tend to give back to the community. But their reach is limited, often with only a few branches. If you’re looking to wire money with a local credit union, learn more about the differences between banks and credit unions.
Best banks for low or zero transfer fees
There are a handful of banks that offer free inbound wire transfers, both domestic and international. The lowest fees were often with online banks and better known financial institutions to invest rather than a typical checking account.
If you have bank transfer fees in progress, consider switching banks to take advantage of them free of charge or at no cost. Most of the banks listed in the table below offer free accounts, which makes it easier to open an account with them, even if you continue your relationship with your current bank.
Some of the lowest fees for inbound wire transfers (domestic and international) include:
- Ally – This online bank charges no fees for incoming transfers and average fees for outgoing domestic transfers. Since Ally has low fees, this is a good option if you plan to receive a lot of leads.
- Discover – While you may be more familiar with Discover for credit cards, they also offer money market accounts and online savings accounts. Discover does not charge for incoming transfers, although the outgoing transfer fee is $ 30.
- Fidelity – Although traditionally known for its investment arm, Fidelity offers a cash management account with no transfer fees.
- Capital One 360 - Another online bank with generally low fees, they offer inbound wire transfers at no charge. Similar to Discover, outgoing domestic transfers are $ 30.
- Axos – Another online bank with an option for a checking account with no monthly maintenance fees, Axos offers free domestic and international inbound bank transfers. The charges for outgoing wires are higher.
And the best bank for outgoing transfers is:
- TD Bank – With locations on the east coast, this bank offers free inbound transfers and one out transfer refund per statement cycle (domestic or international), making it a great option if you make transfers frequently .
|Bank||Incoming domestic costs||Outgoing domestic expenses||Incoming international charges||Outgoing international charges|
|Ally||$ 0||$ 20||$ 0||–|
|Discover||$ 0||$ 30||$ 0||$ 30|
|loyalty||$ 0||$ 0||$ 0||up to 3%|
|Capital One 360||$ 0||$ 30||$ 0||–|
|Axos||$ 0||$ 35||$ 0||$ 45|
|TD Bank||$ 0||$ 0 to $ 25||$ 0 – $ 35||$ 0 to $ 45 and more|
|Citibank||$ 0 – $ 25||$ 0 – $ 35||$ 0 – $ 35||$ 0 – $ 35|
|Ray||$ 10||$ 18 – $ 20||$ 10||40 $|
|Wells fargo||$ 15||$ 30||16 $||$ 35 – $ 45|
|chase away||$ 15||25 $||$ 15||$ 5 – $ 40|
|Bank of America||$ 15||$ 30||16 $||$ 35 – $ 45|
Most banks charge for outgoing wire transfers (domestic and international), so if you can avoid sending a wire this is your best bet.
Some banks have different fee levels depending on the account – so you’ll want to check your account in particular.
Unfortunately, many online banks don’t offer wire transfers yet, so if this is a service you need, check the list above to make sure your online banking is listed. If not, you will either have to find another way to get / send your money or open another account with another bank.
Related: Best No-Fee Banks
With the proliferation of peer-to-peer payment apps and free online bank transfers, there are plenty of ways to avoid wire transfer in the first place. But if you need to wire money, look for a bank account with no fees or with low fees.